Selection bias in HMOs and PPOs: a review of the evidence

Early studies of selection bias found that group and staff model health maintenance organizations (HMOs) enjoyed favorable selection (i.e., attracted healthier enrollees) among the nonelderly population. This review concludes that all health plans which restrict an enrollee's choice of provider--that is, group, staff, and individual practice association (IPA) HMOs and exclusive provider organizations (EPOs)--enjoy favorable selection among both the nonelderly and elderly populations. This suggests that the most important reason HMOs and EPOs experience favorable selection is that individuals who consume large amounts of health resources often are unwilling to sever ties with their health care providers.